The corporate regulator has begun civil action against two former directors of Tennis Australia for awarding television broadcast rights for the Australian Open to the Seven Network without a competitive tender process.
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The Australian Securities and Investments Commission has issued civil penalty proceedings in the Federal Court against Harold Mitchell and Stephen Healy.
The case relates to Tennis Australia board's decision in 2013 to award domestic television broadcast rights for the Australian Open tournament to Seven for a five-year period without a competitive tender process.
ASIC is alleging Mr Mitchell and Mr Healy withheld information from the board when it decided to award the rights and failed to ensure it was fully informed about the value of the rights and interest from other parties.
It's also alleged they failed to advise the board Tennis Australia was likely to obtain better terms by putting the rights out to tender.
Further, it's alleged Mr Mitchell passed confidential information onto Seven about the interest of its competitors in acquiring the rights.
He also is accused of downplaying the interest of parties in acquiring the rights, to the board, and encouraging the board to make an agreement with the network, rather than go out to tender.
ASIC wants the court to declare Mr Mitchell and Mr Healy breached the Corporations Act, with each breach attracting a $200,000 penalty for individuals.
It is also seeking that penalties be ordered against the pair and that both be disqualified from managing corporations.
Mr Healy was appointed a director of Tennis Australia in 2008 and resigned in 2017, and was president between 2010 and 2017.
Mr Mitchell was a director between 2008 and 2015 and reappointed again that year. He retired from the board last month. He also served as vice-president.
Australian Associated Press
